On The Money: Lawmakers hammer Zuckerberg over Facebook controversies | GOP chair expects another funding stopgap | Senate rejects Dem measure on SALT deduction cap workarounds

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THE BIG DEAL– Libra in limbo as lawmakers hammer Zuckerberg over Facebook controversies: Facebook CEO Mark ZuckerbergMark Elliot ZuckerbergZuckerberg set for grilling over Facebook cryptocurrency On The Money: Waters clashes with Trump officials over ‘disastrous’ housing finance plan | Dems jump into Trump turf war over student loans | House passes bill targeting anonymous shell companies Hillicon Valley: Zuckerberg would support delaying Libra | More attorneys general join Facebook probe | Defense chief recuses from ‘war cloud’ contract | Senate GOP blocks two election security bills | FTC brings case against ‘stalking’ app developer MORE on Wednesday fielded sharp criticism and tough questions about nearly all aspects of his company’s business practices at a hearing about Facebook’s new cryptocurrency project Libra.

The aggressive questioning underlined how difficult it will be for the Libra project to move past the baggage of Facebook’s various controversies, which have angered lawmakers on both sides of the aisle.  

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During the House Financial Services Committee hearing, Zuckerberg found some allies in Republican lawmakers who praised the tech executive’s “entrepreneurial spirit” and the “innovation” of the Libra coin.

But over the course of the day, Republicans and Democrats alike pummeled Zuckerberg over Facebook-related issues, including:

  • The continued presence of hate groups on the platform, 
  • The company’s struggles to stave off foreign election interference, 
  • Its policies on disinformation, 
  • How the company treats its content moderators,
  • And why it hopes to move into the financial services space when it is already facing intensifying scrutiny of its market dominance.

“You have opened up a serious discussion about whether Facebook should be broken up,” said Rep. Maxine WatersMaxine Moore WatersOn The Money: Waters clashes with Trump officials over ‘disastrous’ housing finance plan | Dems jump into Trump turf war over student loans | House passes bill targeting anonymous shell companies House passes bill taking aim at anonymous shell companies Avoiding the snake in the grass: Let’s not allow impeachment to divide us MORE (D-Calif.), chairwoman of the House Financial Services Committee.

The Hill’s Emily Birnbaum and I take you there.

 

How Zuckerberg handled the heat: 

  • Zuckerberg remained serious and reserved throughout the six-hour hearing, and even seemed aggravated during particularly rough lines of questioning as the day wore on. 
  • Zuckerberg offered a staunch defense of the controversial cryptocurrency project, which has faced skepticism and pushback from regulators around the world since Facebook announced its plans over the summer. He said the cryptocurrency project could help bring financial services into the hands of billions of people worldwide.

“We’ve faced a lot of issues over the past few years,” Zuckerberg conceded. “I’m sure there are a lot of people who wish it was anyone but Facebook who is helping to put this forward.” 

“But there’s a reason we care about this,” he continued. “Facebook is about putting power in peoples’ hands.”

 

Reactions:

  • “Libra is Facebook, and Facebook is you,” said Rep. Ayanna PressleyAyanna PressleyAOC: Trump comparing impeachment inquiry to a lynching is ‘atrocious’ These 3 women are defining the race to unseat Trump Ocasio-Cortez mourns Cummings: ‘A devastating loss for our country’ MORE (D-Mass.). “You’ve proven we cannot trust you with our emails, with our phone numbers, so why should we trust you with our hard-earned money?”
  • “I think we should advance. I think we should seek innovation. I’m not opposed to some of the things that you’re trying to do,” said Rep. Barry Loudermilk (R-Ga.). “I’m gravely, gravely concerned about the implications they may have.”
  • “You’re creating a whole new currency that could potentially be anonymous and could hide all types of criminal activity,” said Rep. Carolyn MaloneyCarolyn Bosher MaloneyHouse passes bill taking aim at anonymous shell companies An unintended burden on small businesses House Republicans ‘demand the release of the rules’ on impeachment MORE (D-N.Y.), who called Libra “a huge concern to all Americans and national security.”
  • “I actually don’t know if Libra is actually going to work,” Zuckerberg said. 

 

And to recap the hearing, check out our live blog on Zuckerberg’s testimony. 

 

ON TAP TOMORROW:

  • The Senate Banking Committee holds a hearing on data privacy, 10 a.m.

 

LEADING THE DAY

GOP chairman expects another funding stopgap, potentially through March: Senate Appropriations Chairman Richard ShelbyRichard Craig ShelbySenators have chance to double funding for women entrepreneurs—they should take it On The Money: Trump dismisses ‘phony Emoluments Clause’ after Doral criticism | Senate Dems signal support for domestic spending package | House panel to consider vaping tax Senate Dems signal they’ll support domestic spending package MORE (R-Ala.) on Wednesday said that deadlock over spending negotiations would likely require Congress to pass a new funding stopgap measure, called a continuing resolution, to prevent a shutdown after Nov. 21.

“Unless a miracle happens around here with the House and Senate, we will have to put forth another CR,” Shelby said.  

  • While the House has passed 10 of its 12 annual spending bills, the Senate has not yet succeeded in passing a single funding bill, largely due to disagreements over Trump’s proposed border wall.
  • On Tuesday, the Senate introduced a package of four smaller, non-controversial spending bills and is expected to begin the process of voting on amendments next week.
  • But the chances of getting any spending bills signed into law in the near future remain slim. Shelby and his House counterpart Rep. Nita LoweyNita Sue LoweyOvernight Defense: Trump weighs leaving some troops in Syria to ‘secure the oil’ | US has pulled 2,000 troops from Afghanistan | Pelosi leads delegation to Afghanistan, Jordan Trump officials say aid to Puerto Rico was knowingly stalled after Hurricane Maria McConnell tees up government funding votes amid stalemate MORE (D-N.Y.) have been negotiating how to divvy up spending between the 12 appropriations bills, with controversy arising in particular over wall-related allocations that Democrats say pulls funding from other priorities.

Unlike the eight-week stopgap that extended funding past the start of the fiscal year on Oct. 1, Shelby said that rumors of a longer CR into February or March were “probably in the ballpark.”

The Hill’s Niv Elis explains why here.

 

Senate rejects Dem measure on SALT workarounds: The Senate on Wednesday rejected a Democratic effort to overturn IRS regulations blocking workarounds to a portion of President TrumpDonald John TrumpGraham to introduce resolution condemning House impeachment inquiry Support for impeachment inches up in poll Fox News’s Bret Baier calls Trump’s attacks on media ‘a problem’ MORE‘s tax law that is disliked by high-tax states.

The Senate voted against the Democrats’ resolution, introduced by Minority Leader Charles SchumerCharles (Chuck) Ellis SchumerTurkey says soldier killed despite cease-fire in Syria Schumer calls for FDA to probe reports of contaminated baby food How Trump and Pelosi went from bad to worse MORE (D-N.Y.), by a vote of 43-52. It was a mostly party-line vote, with Sen. Michael BennetMichael Farrand BennetThe Hill’s Morning Report – Presented by Better Medicare Alliance – Trump’s impeachment plea to Republicans Bennet, Udall aim to conserve 30 percent of US lands by 2030 From learning on his feet to policy director MORE (Colo.), a 2020 presidential candidate, the only Democrat to vote against the resolution and Sen. Rand PaulRandal (Rand) Howard PaulSenate Democrats to hold caucus meeting Wednesday with ex-ISIS envoy Partisan squabbles endanger congressional response to Trump’s course on Syria Paul blocks vote on House-passed Syria resolution for second time MORE (Ky.) the only Republican to vote in favor.

While Democrats’ effort was unsuccessful, it is notable because it’s the first time they forced a vote to overturn IRS rules relating to Trump’s tax law. The vote highlights how Democrats from high-tax states — such as New York, New Jersey and California — view the tax law’s cap on the state and local tax (SALT) deduction as a top priority and the challenges they face in doing away with it.

“As bad as the Trump tax bill is for the whole country, it’s even worse for states like New Jersey,” Sen. Bob MenendezRobert (Bob) MenendezTurkey sanctions face possible wall in GOP Senate Paul blocks Senate vote on House-passed Syria resolution House to vote on resolution condemning Trump’s Syria pullback MORE (D-N.J.) said on the Senate floor ahead of the vote.

The details: The tax law Trump signed in December 2017 imposed a cap on the SALT deduction of $10,000.

Republicans capped the deduction in order to raise revenue to pay for tax cuts elsewhere in the law, and because they viewed the deduction as subsidizing higher state taxes. They have noted that analysts have estimated that most people got a tax cut for 2018 under Trump’s law, even in high-tax states.

But efforts to repeal the SALT deduction cap have also faced criticism among progressives, because analysts across the ideological spectrum have estimated that repealing the SALT deduction cap would primarily benefit high-income taxpayers.

The Hill’s Naomi Jagoda has more on the vote and the complicated politics here.

 

House committee advances measure taxing nicotine in vaping products: The House Ways and Means Committee approved legislation Wednesday that would impose a federal tax on the nicotine used in liquid vaping products.

The panel approved the measure in a mostly party-line vote of 24 to 15, with Rep. Lloyd DoggettLloyd Alton DoggettHouse progressives to push for floor amendments on Pelosi drug price bill Overnight Health Care — Presented by Partnership for America’s Health Care Future — Four companies reach 0M settlement in opioid lawsuit | Deal opens door to larger settlements | House panel to consider vaping tax | Drug pricing markup tomorrow Overnight Health Care — Presented by National Taxpayers Union —Dem wants more changes to Pelosi drug pricing bill | Ebola outbreak wanes, but funding lags | Johnson & Johnson recalls batch of baby powder after asbestos traces found MORE (D-Texas) voting present. Two Republicans, Reps. Tom RiceHugh (Tom) Thompson RiceHouse committee advances measure taxing nicotine in vaping products Democrats struggle with repeal of key Trump tax provision The Hill’s Morning Report – Trump struggles to replicate 2016 coalition MORE (S.C.) and Vern BuchananVernon Gale BuchananMORE (Fla.), voted with Democrats, while Rep. Stephanie MurphyStephanie MurphyLawmakers set to host fundraisers focused on Nats’ World Series trip House Democrats change drug pricing bill in bid to address progressive concerns Hillicon Valley: Zuckerberg to testify on Libra | Extremists find home on Telegram app | Warren blasts Facebook for not removing anti-Biden ad | California outlaws facial recognition in police body cameras | China rips US tech sanctions MORE (D-Fla.) joined Republicans in opposing the measure.

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The move comes amid growing concerns over the health effects of vaping, as a respiratory illness linked to vaping products spreads across the country.

“A whole generation of our children are getting addicted to nicotine” through the use of vaping products, said Rep. Tom Suozzi (D-N.Y.) said at Wednesday’s markup. “For young people especially, who have less money and therefore higher price elasticity, taxes on vaping products are an effective way to decrease usage.”

The Hill’s Naomi Jagoda has more here.

 

GOOD TO KNOW

  • An attorney for President Trump told a federal appeals court Wednesday that Trump could not be prosecuted even if he shot someone on Fifth Avenue in New York amid a legal fight over his financial records that seems destined for the Supreme Court.
  • President Trump announced Wednesday that his administration would lift sanctions on Turkey after Ankara agreed to stop an offensive in northern Syria and agreed to a permanent cease-fire. 
  • Unemployment may be hovering near a 50-year low, but only 40 percent of America’s workers say in a new survey that they are working in “good” jobs.

 

ODDS AND ENDS

  • Rep. Alexandria Ocasio-CortezAlexandria Ocasio-CortezTlaib to join Sanders at campaign rally in Detroit AOC: Trump comparing impeachment inquiry to a lynching is ‘atrocious’ Former Obama official pushes back against assertion of unfair Sanders media coverage MORE (D-N.Y.) grilled Facebook CEO Mark Zuckerberg about his company’s new political ad policy during a House Financial Services Committee hearing Wednesday.